Last chance today to sell one more home if you want it to be counted in the 2015 numbers. And what a year it was for Santa Fe residential real estate! We have likely seen the last of the really cheap mortgage money, a national trend, and also have seen inventory drop to the lowest recorded levels over the last 15 years. We didn’t just see it drop, we sold the homes that were available which today makes a buyer’s decision more difficult than it has been in a decade or so. Choices are usually plentiful in the higher price ranges where there are still some “bargains”, defined as: you are able to purchase a home well below replacement cost. In the lower range and segments of the middle, the inventory is limited and what has quality usually goes quickly. There you are seeing value as a larger issue than price alone. Location and proximity are now more important than they have been in a decade. That is also a successful theme with the younger buyers: proximity to services without needing a car.
The market in 2016 should follow the same trends; shrinking inventory and a gradual increase in sales of units. If we pick up speed, you will be able to track it here.
2015 will finish out with a unit sold percentage increase of slightly over six. Last year-end, December 31, 2014 showed only a 3.8% increase over the year of 2013 so we are building decent momentum at last. Speaking of building, our contractor friends are finding more opportunity these days, with numerous custom pre-sold homes underway. It is refreshing to see that industry have a chance to rev up employment and material purchases again. As much as Santa Fe has grown over the last 30 to 40 years, being without a healthy construction industry has hurt our area economy substantially. That may be changing in the next couple years.
Lenders continue to get pounded by solid and substantial customers who cannot believe the hoops they must jump through to get mortgage money to buy. We knew there would be a reaction to the questionable business ethics of the lending and financial industries that created the worst economic crisis of the last 75 years. The new rules are tough as they should be. It still could be seen as punishment of the qualified.
The City of Santa Fe makes lots of noise about retaining its young people, who seem to prefer to move away as soon as they get out of school. Many friends did exactly that and that trend has been in place for decades. Whether it be high-speed internet access, affordable housing near transportation routes and walking distance to services, or a new more widely served airport facility, economic development still seems, as it has for over 30 years, to be founded on education, education and education. When New Mexico picks itself up off the ground and starts making itself more attractive to clean businesses, entrepreneurs, whiz kids and brainstorming nerds, we might be able to afford better schools and educators. Or its the other way around? Go deep into debt to have the best education, then you get to be selective in who you persuade to live and work here. Truly a student loan program if I see it right.
Back to the land, the dirt we peddle as professional real estate sales people, it is still the best investment going, even if you buy a parcel of land and don’t do anything but pay taxes for 15 years, you will never go wrong. Can you lose money? Yes. Can you lose money on other investments? Yes. Buy a residential lot today and sit on it. Someday someone will want it. It’s a good thing to have something that other people want.
Look for year-end statistics and trend lines posted to thus blog starting about Monday the 11th of January 2015 (or sooner if I don’t take some ski days). The market is solid and stable. It is not record-setting and it is not limping along. You can puff out your suspenders when bragging you are a part of what is going on here in little old Santa Fe, New Mexico.
Holidays are for celebration and for spending time with those you love. Love the one you’re with.